The US Supreme Court ruling curbing the US President’s emergency tariff powers has brought short-term relief for India. However, analysts warn that trade uncertainty is far from over, with fresh sector-specific levies likely after the 150-day window under Section 122 ends.
The heightened global trade tensions after Trump signalled the possibility of a 15 percent global tariff have added to this situation. Markets are now closely tracking both India’s growth outlook and the evolving US trade stance in the second half of 2026.
Analysts say the new framework is relatively favourable for India:
India was earlier expected to face tariffs of around 18 percent.
Now, nearly 60 percent of India’s exports to the US will attract a 10 percent tariff.
The effective tariff rate is estimated at 9.1 percent, compared with 13.7 percent under the early-February 2026 trade arrangement.
The peak rate had earlier touched 32.7 percent in calendar year 2025.
India’s estimated 9.1 percent rate is seen as lower than or comparable to several Asian peers such as Vietnam, Thailand, Bangladesh and Cambodia, giving Indian exporters a competitive edge.
In addition:
Around 34.2 percent of India’s exports to the US remain exempt from tariffs.
These exempt exports are valued at nearly 0.7 percent of India’s nominal GDP, offering a cushion to exporters.
The 10 percent tariff has been imposed under Section 122, which can remain in place only for 150 days.
Analysts expect:
Importers to frontload shipments in the first half of calendar year 2026.
Companies to take advantage of the current lower tariff before policy clarity emerges.
A wait-and-watch approach in the second half.
After the 150-day window, the key question is which tariffs will continue and at what rates.
Analysts believe the US administration may shift towards more durable, sector-based tariffs under other legal provisions:
Section 232 (national security) – covering sectors such as pharmaceuticals and semiconductors.
Section 201 – safeguard duties on products such as solar panels and large residential washers.
Section 301 – targeting digital services taxes, maritime and shipbuilding practices, and e-commerce policies.
Tariffs under Sections 232 and 301 typically do not have a rate cap, making them potentially more disruptive.
Notably, the court ruling does not affect existing Section 232 duties on steel, aluminium, automobiles and copper, which continue to apply.
While the court ruling offers immediate relief to India, clarity is still lacking on the post-150-day tariff regime. With the US likely to rely more on sector-specific trade laws, exporters may face renewed volatility in the second half of 2026.
